The business outlook has improved, with the PMI figure standing at 48.7, unmoved from December's figure.

Commenting on the report, CIPS CEO David Noble said:

"Snow compounded difficult economic conditions to ensure the construction sector's winter blues continued into january. Yet against expectations, businesses have a spring in their step looking ahead to 2013. This new-found confidence has been buoyed up by news of public investment, but it could be found wanting, if the Government's recent rhetoric on major infrastructure projects fails to bear fruit.

"In a reversal of fortunes, the commercial sector stabilised after a tough second half of 2012, while civil engineering has experienced its first decline in five months. The housing sector continues to contract albeit at a less severe pace than we have become used to in the last year.

"Levels of new business had been falling at a worrying pace and this decline appears to have stabilised to some extent; perhaps this is one of the reasons employment has grown for the first time since September. Like much of the sector, however, staff numbers remain below the long-term average and we expect this trend to continue across the board."